The ‘780 and ‘962 patents relate to a process for making a stable solid formulation of an enalapril sodium for use in the treatment of high blood pressure. Merck & Co. (“Merck”) manufactures an enalapril sodium under the trade name VASOTEC® and has done so since 1983. During a 1994 trial in Canada between Merck’s and Apotex USA, Inc.’s (“Apotex”) Canadian affiliates concerning Merck’s Canadian patent covering the enalapril sodium compound, Dr. Bernard Sherman, an Apotex official, heard the testimony of Merck’s Vice President of Marketing as he narrated a videotape demonstrating Merck’s process for manufacturing VASOTEC®. Within days of hearing this testimony, Dr. Sherman allegedly conceived the patented process at issue. Apotex obtained the ‘780 and ‘962 patents and later sued Merck for infringement. The district court, however, found the patents invalid on SJ.

On appeal, Apotex argued that the district court improperly invalidated the patents because Merck had failed to prove by clear and convincing evidence that it did not suppress or conceal the patented process. Apotex further contended that proof that Merck did not suppress or conceal the process could not be satisfied by foreign disclosures or other foreign activities. The Federal Circuit rejected this argument, however, concluding that proof negating suppression or concealment is not limited to activities occurring within the United States.

The Court then turned to an issue that it had not previously squarely addressed, i.e., the burdens of proof governing the determination of suppression or concealment as negating prior invention. After reviewing related precedent and interference law, the Court ruled that § 102(g) requires that once a challenger of a patent has proven by clear and convincing evidence that the invention was made in this country by another, the burden of production shifts to the patentee to produce evidence sufficient to create a genuine issue of material fact as to whether the prior inventor has suppressed or concealed the invention. The ultimate burden of persuasion, however, remains with the party challenging the validity of the patent.

Applying its new law to the case at hand, the Court found that Apotex had satisfied its burden of producing evidence sufficient to create a general issue of material fact that Merck had suppressed or concealed its process of manufacturing enalapril sodium tablets. Although Merck had perfected its process and began commercially using its process to manufacture VASOTEC® tablets no later than 1983, Merck took no steps to make the invention public for nearly five years, when it first published the ingredients used in the process in the 1988 edition of the Dictionnaire Vidal. The Court found that such delay raised an inference that Merck had suppressed or concealed its invention.

However, Merck had rebutted this inference by showing that it had resumed its activity concerning this process and made several disclosures before Apotex’s entry into the field. Thus, the Court affirmed the finding of invalidity of the two Apotex patents.